mission parts michales brands

Michaels is the largest arts and crafts retail chain in North America. In addition to our retail outlets, The Michaels Companies also own multiple brands that allow us to collectively provide arts, crafts, framing, floral, home décor, and seasonal merchandise to hobbyists and do-it-yourself home decorators. We believe anyone can make, and we’re on a mission to inspire and encourage everyone to unleash his or her inner maker.

The Federated Hall of Fame induction took place during the recent Automotive Parts Services Group meeting in Grapevine, Texas. Cardone’s son, Michael Cardone III, accepted the award on behalf of his father.

“On Jan. 15, 2004, over 14 years ago, my father succumbed to colon cancer. Like many people, I was suddenly thrust into a new leadership role as the next generation leader. Some predicted that I would fail, but many people offered great advice,” said Bo Fisher, chairman of Federated Auto Parts. “One person, Michael Cardone Jr., asked to have lunch at AWDA that year. He shared inspirational guidance based on a similar experience, quoted relevant scripture and followed up with deeply personal, written correspondence. We’ll never forget his wise and kind words. He offered astute advice and encouraged us to do more than just follow in our predecessor’s footsteps. We could be different and seek new, creative paths to success.

In the past, companies rarelyperceived themselves as agents of social change. Yet the connection between social progress and business success is increasingly clear. Consider these examples: The first large-scale program to diagnose and treat HIV/AIDS in South Africa was introduced by the global mining company Anglo American to protect its workforce and reduce absenteeism. The €76 billion Italian energy company Enel now generates 45% of its power from renewable and carbon-neutral energy sources, preventing 92 million tons of CO2 emissions annually. And MasterCard has brought mobile-banking technology to more than 200 million people in developing countries who previously lacked access to financial services.

Starting in October 2009, Yara worked to bring together 68 organizations, including multinational companies, civil society groups, international aid agencies, and the Tanzanian government, in a partnership known as the Southern Agricultural Growth Corridor of Tanzania (SAGCOT), which was initiated at the World Economic Forum Africa summit in 2010. The mission was to build a $3.4 billion fully developed agricultural corridor from the Indian Ocean to the country’s western border, covering an area the size of Italy. It has involved, among other things, investing in infrastructure, including the port, a fertilizer terminal, roads, rail, and electricity; fostering better-managed farmer cooperatives; bringing in agro dealers and financial services providers; and supporting agro-processing facilities and transport services. Public sources have provided one-third of SAGCOT’s funding; the rest comes from the participating private enterprises. Although originally envisioned as a 20-year project, the corridor was well established within three years and has already bolstered the incomes of hundreds of thousands of farmers. Yara was decisive in launching the effort but did not lead or control it. Nor was the company’s investment—$60 million—a major part of the funding. Yet the project has boosted Yara’s sales in the region by 50% and increased the company’s EBITDA by 42%.

Societal constraints are not limited to emerging markets, of course. In 2012, as Walmart was working to eliminate 20 million tons of greenhouse gas emissions from its supply chain and reduce its packaging costs, it encountered an unexpected roadblock: Its suppliers could not source enough recycled plastic to use in their packaging. It turned out that 45% of the U.S. population lived in cities that were still dumping trash in landfills. Even though recycling would have yielded significant new revenues and savings, cash-strapped municipalities could not afford the up-front investment required for collection and sorting equipment and for campaigns to change consumer behavior. So in April 2013 Walmart, like Yara, convened a cross-sector coalition of NGOs, city managers, recyclers, major consumer brand companies (including direct competitors such as Unilever and P&G), and financing experts from Goldman Sachs. Many of the participants had spent years trying to launch their own recycling programs; by the time they met, all recognized that the problem could be solved only by collectively addressing the challenge of financing municipal curbside recycling.

To date the fund has financed 10 projects with a total of $80 million: $20 million of its own capital and $60 million from co-investors. As the result of one project, every household in Memphis, Tennessee—a city that had no curbside recycling whatsoever—now has access to convenient recycling carts. These 10 projects alone are expected to reduce annual waste to landfill by more than 800,000 tons and cut greenhouse gas emissions by more than 250,000 tons while creating hundreds of jobs. And the benefits to Walmart are considerable: The increased availability of recycled materials strengthens its supply chain and reduces the cost of packaging. Again like Yara, Walmart neither led nor controlled its cross-sector effort—but it provided the necessary impetus.

Collective impact is based on the idea that social problems arise from and persist because of a complex combination of actions and omissions by players in all sectors—and therefore can be solved only by the coordinated efforts of those players, from businesses to government agencies, charitable organizations, and members of affected populations. What’s needed is nothing less than changing how the system functions. Collective-impact efforts have made significant progress on issues as diverse as education, homelessness, juvenile justice, substance abuse, childhood obesity, job creation, and pollution.

Just as companies should not lead or control a collective-impact effort, they should not try to impose an agenda. But they can initiate the process of reaching one, using their relationships to assemble key participants. The Closed Loop Fund, for example, emerged from a lengthy campaign—including an initial gathering of 30 consumer goods companies—to align numerous parties around a shared understanding of the problem and its solution. The idea of a social-impact fund using capital from participating companies arose in the very first meeting; however, developing the business case took eight months of work. Walmart CEO Doug McMillon played an instrumental role in the fund’s launch: He asked his counterparts in major companies, including Procter & Gamble, PepsiCo, Unilever, Johnson & Johnson, Keurig Green Mountain, and Coca-Cola, to publicly commit to involvement. Another eight months of legal work ironed out the model—a limited-partnership structure with a fund management team in charge of reviewing and advising on city applications and an independent investment committee responsible for funding decisions. In October 2014, 18 months after the initial impetus, the fund closed its first round of financing and began issuing requests for proposals.

At SAGCOT, the long-term vision determined the sequence of investments and activities, starting with broad infrastructure improvements. Better roads and a more efficient port had to precede investments in refrigerated transport and increased yields. The Tanzanian government ended its export ban, waived taxes on irrigation equipment, eliminated a crop tax, generated new land-use plans, and spent $211 million modernizing the port. Aid agencies financed roadwork and facilitated farmer co-ops. Yara focused its direct investment on port infrastructure and agro-dealer networks—areas in which it had extensive knowledge from its activities in other parts of the world. To help coordinate the initiative, it drew on its experience with global agricultural markets and its work in Tanzania and other African countries in conjunction with the UN Millennium Project’s Hunger Task Force and the Tanzanian Agricultural Partnership.

Consider Ron Gonen and Rob Kaplan, cofounders of the Closed Loop Fund. Gonen led New York City’s recycling program; prior to that, he started Recyclebank, a company that has promoted recycling in more than 4 million U.S. households. Kaplan spearheaded Walmart’s efforts to reduce greenhouse gas emissions throughout its supply chain and was responsible for packaging sustainability. Together the two are experienced in all aspects of recycling and product supply chains—from municipal collection to retail procurement, and across business, nonprofits, and politics—giving them the credibility and insight to engage all parties. Such cross-sector experience is essential among system leaders and enables them to speak the language and appreciate the motivations of each sector.

A company’s choice of the right internal champion for system leadership is critical both to bringing the company to action and to keeping the other partners focused on the common agenda. For example, Kaplan first helped Walmart appreciate the link between its emissions and broader recycling-system failures and then raised awareness among the company’s product purchasers, helping them “see” the hidden savings that could be obtained by using recycled materials. And he was instrumental in helping McMillon secure public commitments from the CEOs and presidents of other corporations.